Monday, December 9, 2013

The central banks have now created a system which is totally dependent on ever-more credit and QE. So there is nothing that can stop them from printing money. On the contrary, they will need to print a lot more. Instead of central banks printing $2 trillion each year, it will soon be $10 trillion, and eventually a lot more. - Egon von Greyerz, King World News interview: LINK

With no meaningful Government and industry association economic reports due out today, the Federal Reserve good cop/bad cop comedy routine will be in full force today. Three regional Federal Reserve Bank presidents will be out today making their empty rhetorical speeches either in favor or against reducing QE. But all three represent nothing more than a modified Abbot and Costello slap-stick comedy routine.

The quote above represents the truth about QE. It reflects my view ever since Bernanke first uttered the word "taper" in May. That is, I said all along that the Fed has been using QE to keep the big banks solvent and the tracks in the snow leading to this conclusion are in there for anybody to examine using the St. Louis Fed data system. I connected the dots last week for everyone here: There Will Be No Taper

The other tell-tale is in the trading action of the U.S. dollar, in which the dollar looks like it has contracted that nasty new HIV strain that is resilient to treatment. I'll have more to say on this sometime this week. In the meantime, get yourself some snacks and pull up a comfortable chair so you can fully enjoy watching Bullard, Lacker and Fisher sling the bullshit around in one humorous scatological production orchestrated by the most corrupt banking system in history. Oh ya, if the brown stuff flying over the airwaves happens to cause a temporary drop in the Comex-driven paper price of gold, use that as an opportunity to add to your precious metals positions.

18 comments:

When those paid to promote an organization or industry acknowledge that customers do not trust you, then you know you have a real problem.

On that note, Wall Street and, dare I say, Washington as well have real problems. Let’s navigate and work our way through some smokescreens.

The industry’s own trade organization, SIFMA (Securities Industry and Financial Markets Association), has recently launched an initiative designated as Our Partnership with You:

This is just one part of a series of initiatives that SIFMA will be rolling out to demonstrate our commitment to putting customers first.

Really? So quaint. Watch your wallets, folks.

SIFMA should save themselves and us a whole lot of time and effort with this initiative and others. If they really care about making a commitment to putting customers first, then perhaps they should simply and vociferously recommend that the industry adopt the fiduciary standard when dealing with customers.

Let’s navigate further down this path and see what those at The Institute for the Fiduciary Standard have to say about SIFMA. From a recent release entitled Wall Street To Try To Win Back Investor Trust, we read:

This week is a big week for Chet Helck. The Raymond James Global Private Client Group Chief and Securities Industry Financial Markets Association (SIFMA) Chairman will oversee the launch of an initiative which, reflecting his own “passion”, will become an indelible part of his legacy. On Thursday SIFMA will announce an initiative to address investor distrust of Wall Street when Judd Gregg, SIFMA CEO, speaks at the National Press Club in Washington. Next Monday, Helck will welcome President Bill Clinton to kick off SIFMA’s annual meeting.

Nice gig Judd has. A little trip through the revolving door likely has him getting paid similar do-re-mi to his predecessor who picked up a cool $3 million in that role. And what do you think ol’ Bubba picked up for his platitudes? But I digress. Back to the topic of investor trust . . .- See more at: http://www.senseoncents.com/2013/12/sifma-to-address-investor-distrust-of-wall-street-really/#sthash.72k52AMs.dpuf

and they bring in same clowns to address the lack of....gregg and clinton?

Nomi Prins, former Wall Street banker and author, says, “There’s this myth . . . that somehow the Fed’s quantitative easing (money printing) is helping to create jobs.” What’s really going on? Prins says, “The big six bank stocks are outperforming the rise in the stock market generally by ten times, and that is really not talked about very much, and that’s a big multiple.” Prins goes on to say, “They are the ones who have received the most benefit, and they are the ones who are still in trouble.” Can the Fed stop supporting the big banks? According to Prins, “The banks can’t survive without the Fed support, period. . . . The Fed will not discontinue its program of helping these banks because the levels of problems are still the same.” According to Prins, depositors could be in trouble during the next banking calamity. Prins contends, “That is a danger. Depositors could lose money because the FDIC would not be able to contain a mega fallout. . . . They’re creating a facade of stability until it falls apart.”

JP Morgan Chase, the Foreign Corrupt Practice Act, and the Corruption of AmericaHow different is bribing China’s “princelings,” as they’re called there, from Wall Street’s ongoing program of hiring departing U.S. Treasury officials, presumably in order to grease the wheels of official Washington? Timothy Geithner, Obama’s first Treasury Secretary, is now president of the private-equity firm Warburg Pincus; Obama’s budget director Peter Orszag is now a top executive at Citigroup.

The Foreign Corrupt Practices Act is important, and JP Morgan should be nailed for bribing Chinese officials. But, if you’ll pardon me for asking, why isn’t there a Domestic Corrupt Practices Act?

Never before has so much U.S. corporate and Wall-Street money poured into our nation’s capital, as well as into our state capitals. Never before have so many Washington officials taken jobs in corporations, lobbying firms, trade associations, and on the Street immediately after leaving office. Our democracy is drowning in big money.

Corruption is corruption, and bribery is bribery, in whatever country or language it’s transacted in.

New Documents Show How Power Moved to Wall Street, Via the New York Fed

By Pam Martens: December 9, 2013

Thanks to a trove of historic documents recently released by the St. Louis Fed, we are now able to see how the New York Fed, a bastion of Wall Street interests, maneuvered itself into control of that process.

Strong, through force of personality, began to channel all trading of U.S. government securities through the New York Fed.

Today, even Benjamin Strong would be shocked at the power concentrated at the New York Fed. The New York Fed is the only one of the 12 regional Federal Reserve Banks to have a Wall Street-syle trading floor with Bloomberg terminals and speed dials to the biggest firms on Wall Street. Since 1935, all open market operations of the entire Federal Reserve system have been carried out by the New York Fed.

On its web site, the New York Fed explains its unique role as the central bank’s central bank: It is the sole manager of the System Open Market Account (SOMA) Despite being the regulator in charge of the largest Wall Street banks at the time that obscene levels of leverage and corruption collapsed the financial system of the United States in 2008, even while top Wall Street CEOs sat on its Board of Directors, the New York Fed continues to be in charge of placing examiners in these banks and functioning as their regulator.The fact that the New York Fed needs the goodwill of the major Wall Street banks to carry out its open market operations and to facilitate the orderly functioning of U.S. Treasury auctions, makes it a highly inappropriate regulator of the same firms, in the opinion of many observers.

You can easily substitute “private equity” in this discussion by Georgetown law professor Adam Levitin of the securitization industry’s efforts to trivialize its abject disregard for the law:

To raise the “it’s just paperwork” argument in the context of securitization, however, is unreal. Securitization is all about legal fictions and paperwork. Why on earth would anyone every bother with the complex legal structures of securitization (typically involving two shell entities) other than to take advantage of legal fictions?

As I’ve noted in other venues, securitization is the legal apotheosis of form over substance, and the basis on which this is legally tolerated is the punctilious observance of formalities. Failure to do so can result in a securitization failing to be bankruptcy remote or to lose its off-balance sheet accounting status or lose its pass-thru tax status, any of which are disasterous. Securitization deals were so heavily lawyered precisely because the paperwork matters. They aren’t like a sale of a used sofa over Craigslist.

Whether private equity fund investors have been cheated out of brokerage fees is a difficult question. By not registering, PE firms have evaded the requirement of registered broker-dealers to provide investors with brokerage commission reports. Investors can’t tell whether they have been cheated out of portions of transaction fees that were supposed to be rebated to them because they never got the information they would need in order to know. It’s much like the NSA before Snowden arguing that nobody could prove illegal spying because the fact of the spying was itself a secret.

How has the SEC missed this flagrant violation of the 1934 Exchange Act for so long? The answer is very simple, and has a surreal Catch-22 quality. Basically, the SEC limits its surveillance for security law violations almost exclusively to those who volunteer to be examined, either as “investment advisers” or “broker-dealers”. Other than shutting down flagrant Ponzi schemes run by two bit hustlers, the SEC does very little even to look for securities law violations among investment firms that don’t comply with requirements to self-register as broker-dealers or investment advisers. Almost all PE firms chose to keep the SEC entirely out of their houses by ignoring the requirement to register as broker-dealers. To the SEC, the private equity industry, and its illegal broker-dealer practices, simply didn’t exist. And Dodd Frank’s registration requirements don’t address this issue. Private equity firms are now required to register as investment advisors, but that regime covers different activities than that of broker dealers, and thus is not relevant to the transaction fee abuse. But, natch, the SEC firms are arguing otherwise: the SEC is already supervising [part of] what they do, so that should be more than enough.

Read more at http://www.nakedcapitalism.com/2013/12/whistleblower-reports-rampant-violation-of-broker-dealer-laws-by-private-equity-firms.html#W2A1xFFtUQjFxboQ.99

I wonder how crafty the lawyers were with the shells that house the gold etf's?

Professor: Obama Becoming The Very Danger The Constitution Was Designed To Avoid

George Washington University Law School Professor Jonathan Turley had this to say about President Obama: "The danger is quite severe. The problem with what the president is doing is that he's not simply posing a danger to the constitutional system. He's becoming the very danger the Constitution was designed to avoid. That is the concentration of power in every single branch."

The student union outlined their stance, “Occupations are a legitimate form of dissent. When our university exploits our staff, shuts down our student union, and are utterly unaccountable to the students and staff that give it life and make it function, students have no choice but to gain leverage in whatever way they can.”

I decided to go back to the most basic of basics to see if I could place the w/w epic collapse of 2007-08 in a historical context, since there's nothing but obfuscating lies and useless time wasting garbage coming out of the maws of nearly every so called expert, guru, newsletter writers and bankster brown-nosing frontmen.If we look at the fall of Rome, the real fall even as given by the best historical researchers down history, it was AD 410, not 476.This could be why no one sees it, intentionally or otherwise.AD 410 to 2007= 1597, a clear natural Fibonacci number.This of course can be broken down into the sum of lesser Fibo numbers, then adding 1.1597= 987+ 610= 610 +377 +233 +144 +89 +55 +34 +21 +13 +8 +5 +3 +2 +1 +1, +1.So every major event, including grand historic ones like Columbus, USA 1776, etc inside that timeframe were, as momentous as they seem actually only far lesser events than 2007.OK, so how big a dead cat bounce comes after, if only briefly? Beats me!We can already eliminate Pi years after the early 2009 low; we're beyond that.A 6.18 after that would be about April/2014.Now look which major asset class despite this huge fall has not crashed yet, not even in 2008 .Could that be when the cat goes splat?

"MONTREAL • Revenu-Québec is seeking prison sentences and fines totalling $750-million for Kitco Metals Inc. founder Bart Kitner and directors with several other gold trading firms following one of the biggest tax fraud investigations in provincial history.

Quebec’s revenue department on Monday said it filed a total of 1,920 charges against Kitco and 11 other companies as well as their directors and an accountant implicated in an alleged fraud scheme linked to gold processing. Some 120 charges were filed against Kitco and another 120 against Mr. Kitner involving total fines of $454.6-million.

“This is an investigation that’s lasted several years and the evidence is significant,” said Revenu-Québec spokesman Stéphane Dion. “Without a doubt, it’s one of the largest investigations we’ve ever done.”

The total amount allegedly derailed by all 12 companies charged was $350-million over a two year period ending in 2010, Mr. Dion said. The ministry claims Kitco specifically made false statements and tried to obtain tax rebates to which it wasn’t entitled. The amount related to Kitco was not made public.

Kitco forcefully denied the allegations. The company last year filed a lawsuit against Revenu-Québec seeking $122-million in damages caused to the company and on Monday, it said its legal action against the department will escalate as a result of the formal charges.

The penal code charges stem from a probe by the tax ministry dubbed Project Carat, disclosed in June 2011. While it defended itself from the allegations, Montreal-based Kitco was granted bankruptcy protection that month. Its current creditor protection extension is set to expire in March 2014.

During the June 2011 raid, more than 175 provincial investigators with search warrants descended on several Montreal area businesses, private residences and offices of accounting firms and bankruptcy trustees. Revenu-Québec alleged some 125 companies in two separate gold trading networks engaged in tax fraud scam on sales transactions worth $1.8-billion. It claimed the firms also avoided paying the federal goods and services tax.

JP Morgan Chase is but a part of the problem. If you want to cut out the root to the overall confrontation regarding precious metals you must first get to the reason for why physical gold and silver has been controlled from the start leading up until present day. Knowledge is power.http://www.silver-investor.com/charlessavoie/cs_may05_pilgrims.htm

“But as the Crisis mood congeals, people will come to the jarring realization that they have grown helplessly dependent on a teetering edifice of anonymous transactions and paper guarantees. Many Americans won’t know where their savings are, who their employer is, what their pension is, or how their government works. The era will have left the financial world arbitraged and tentacled: Debtors won’t know who holds their notes, homeowners who owns their mortgages, and shareholders who runs their equities – and vice versa.” – The Fourth Turning – Strauss & Howe

Despite arising doubt towards the US dollar (USD) as the global reserve currency since the financial crisis in 2008, the USD-centric system of world trade and finance remains an important cornerstone of the post-Cold War global economic order.

The strategic ‘Game’ to preserve the USD’s global status is now focus of international political and economic activity; the US makes a new kind of non-military offensive against developing and transforming countries derived from her ability to set favorable rules, an ability she possesses throughthe dollar hegemony.

Game of Nations: New Frontier

Based on historical encounters (like the Soros attack on Southeast Asian countries) the outcome of successful attacks will not be limited to finance. Outcomes include widely deteriorating trade conditions, widespread enterprise bankruptcies, high level of unemployment and escalation into political-social crises. As the globalized economy evolves, securitization of the real economy and the subsequent leverage from financial derivatives can sharply increase risks to economies targeted by financial war. One successful blow is like a ‘targeted killing’ towards an enterprise or even a nation’s economy, followed by a collapse and then regression.

A financial war may not be violent like a physical conflict, but it makes another succumb to one’s will through different means. A political motive exists as well. A financial attack initiated by a nation or a non-national entity are both able to achieve a national strategic intent.

Eric Arthur Blair aka George Orwell

"Hope" is not a valid investment strategy

Full Time Jobs Over Last 5 Years

Is Your Gold Missing?

Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Epic Quote - "Jesse" Sent This To Me

"The world will soon wake up to the reality that everyone is broke and can collect nothing from the bankrupt, who are owed unlimited amounts by the insolvent, who are attempting to make late payments on a bank holiday in the wrong country, with an unacceptable currency, against defaulted collateral, of which nobody is sure who holds title." - Anonymous

The Basic Fundamental Problem

What's the solution?

“THERE IS NO MEANS OF AVOIDING THE FINAL COLLAPSE OF A BOOM BROUGHT ABOUT BY CREDIT EXPANSION. THE ALTERNATIVE IS ONLY WHETHER THE CRISIS SHOULD COME SOONER AS THE RESULT OF A VOLUNTARY ABANDONMENT OF FURTHER CREDIT EXPANSION OR LATER AS A FINAL AND TOTAL CATASTROPHE OF THE CURRENCY SYSTEM INVOLVED.”

Ludwig von Mises – Austrian Economist (1881- 1973)

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie? JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

Priceless Quote From Richard Russell

On Larry Summers: This doofus practically ruined Harvard when he headed it. I can't think of a worse choice to be chief economic advisor. I wouldn't trust Summers to manage a Starbucks franchise.

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.

Quote of the Month

And very relevant in the context of yesterday's post about gold moving higher against all fiat currencies:

Just imagine what would happen if a mere ten percent of the money currently going into bonds were instead to go into gold. As in 1972, the real move has yet to begin.

- Murray Pollit, Pollit & Co.

A Picture Says It All...

www.moneyandmarkets.com

Golden ore samples produced by Eurasian Minerals

Undisclosed exploration site

The Next Reserve Currency?

1 oz. Chinese Panda

Guess who said this?

Rising prices of precious metals and other commodities are an indication of a very early stage of an endeavor to move away from paper currencies...What is fascinating is the extent to which gold still holds reign over the financial system as the ultimate source of payment.

-Alan Greenspan, 9 Sep 2009

THIS is what REAL money looks like

1 oz. Gold Eagles

Alan Greenspan said what?

“Deficit spending is simply a scheme for the ‘hidden’ confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.”

From "Gold and Economic Freedom" a 1966 Essay by Alan Greenspan

About Me

I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for a large bank. I have an MBA from the University of Chicago, with a concentration in accounting and finance.
Currently I co-manage a precious metals and mining stock investment fund in Denver.
My goal is to help people understand and analyze what is really going on in our financial system and economy.